Banks are concerned about the rising non performing assets in their restructured loan portfolios since the impact of global crisis is not over yet. The problem is more severe in case of public sector banks.

Most of the state-owned banks, under the restructuring schemes have rescheduled the repayment period or altered interest rates to attract new borrowers amidst the slowdown. This facility was allowed by the apex bank for a time span of one year and it also permitted the banks to classify these restructured loans as standard assets.

As on September 30, the share of restructured loans to the total loans was a meagre 0.26 percent in case of HDFC, while 6 percent in case of PNB.

An analyst disclosed that around 2 percent of the restructured loans of PNB had already been identified as bad loans. Mudit Painuly, a banking analyst at Macquarie, said in a recent report that PNB undertook an additional restructuring of Rs. 850 crore in the July-September quarter. with this the total restructured loans stood at Rs 9800 crore which was one of the highest and the firm estimated that a third of this could turn delinquent over the nest six quarters.

Besides PNB, other state-owned banks that have high portions of restructured accounts include SBI (21,792 crore), IDBI bank (9,000 crore), Bank of India (Rs 8538 crore) and Union bank of India (Rs 4580 crore). Amongst the private banks, ICICI and Axis bank have large shares of restructured accounts at Rs 4,857 crore and Rs 2,363 crore respectively.

Recently the bank regulator, RBI has directed the banks to increase provisioning requirements for NPAs to 70 percent which include floating provisions. RBI wants the banks to achieve this target by September 2010. Banks, however, have requested the apex bank to extend the deadline.